Personal Trust

DEFINITION of 'Personal Trust'

A trust created for a person or persons. Personal trusts can be used by wealthy or middle-class beneficiaries to accomplish a variety of financial objectives. Personal trusts are separate legal entities that have the authority to buy, sell, hold and manage property for the benefit of their beneficiaries.

BREAKING DOWN 'Personal Trust'

Personal trusts can take many forms. They can be revocable or irrevocable, living or testamentary. They can fund education expenses, meet special needs of beneficiaries or allow them to avoid or reduce estate taxes. They can also be separate taxable entities or pass-through entities.

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RELATED FAQS
  1. What percentage of withdrawals from a trust fund is taxed?

    I have inherited a trust fund. This is the first time I have considered pulling money from the account.  ... Read Answer >>
  2. What are the keys to setting up a trust fund?

    Setting up a trust to secure your assets for a beneficiary allows you to set the terms under which the beneficiaries are ... Read Answer >>
  3. What is the difference between a revocable trust and a living trust?

    Learn how a revocable trust and living trust are two terms used to describe the same thing and what the key provisions are ... Read Answer >>
  4. What is the difference between revocable and irrevocable intervivos trusts?

    Learn what an inter-vivos trust is, the difference between an irrevocable and a revocable inter-vivos trust, and why it is ... Read Answer >>
  5. How are trust fund earnings taxed?

    Trust fund earnings that are distributed are paid by the beneficiary. The trust pays taxes on retained earnings and principal ... Read Answer >>
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    Find out more about irrevocable trusts, revocable trusts and the main differences between them. Read Answer >>
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